FCA Consumer investments, scams and fraud review (April – September 2021)

FCA | March 3, 2022

This is our third Consumer investments data review. It gives an overview of our work to protect consumers from investment harm in the 6 months between April and September 2021. We published our Consumer Investments Strategy towards the end of this period, setting out our ambition for this market. As well as providing greater transparency, these data reviews provide useful insight into specific areas of our Strategy, particularly higher-risk investments and scams. Our previous review covered the 12 months to 31 March 2021.

See:  FCA Capital markets priorities

Summary of key findings

  • In our last Consumer investments data review, we saw enquiries to the FCA about possible scams increase sharply from mid-2020 onwards. In this review, we found that scam enquiries remained consistently high between April and September 2021. We had over 16,400 enquiries about possible scams in the period, approximately a one third increase on enquiries over the same period in 2020 (12,400). The top 4 types of scams reported were boiler rooms, cryptocurrency scams, FCA-impersonation scams and recovery rooms.
  • We saw an increase in reports about possible cryptocurrency scams, both to our Supervision Hub (up 14% on the previous 6 months) and our ScamSmart website (up 49%). Our Cryptoasset team in Supervision opened over 300 cases relating to potential unregistered cryptoasset businesses in this period, many of which are likely to be involved in scams. During the same period, we added 172 firms to our Unregistered Cryptoasset Businesses list.
  • Our Authorisations, Supervision and Enforcement Divisions are acting assertively and working together to prevent, detect and tackle investment harms. We published 735 consumer alerts about unauthorised firms or individuals in the 6-month period. This continues the upward trend noted in our last report, with 1,317 consumer alerts over 12 months in 2020/21 and 742 over 12 months in 2019/20. We received over 16,300 reports of potential unauthorised activity in the review period.
  • At the gateway, we stopped 32 new firms (1 in 4) from entering the consumer investments market between April and September 2021. In 9 of these cases, we suspected phoenixing or lifeboating by advice firms (the same number we reported in the last review for the whole of the previous 12-month period).
  • Between April and September 2021 our Pension Scams team opened 51 cases on the basis of data analysis, related to suitability of pension transfer advice and potential scams.

See:  FCA to use assertive supervision for new Consumer Duty expected to shift industry’s mindset

  • Our Enforcement work led to custodial sentences for 3 unauthorised individuals. We also persuaded 27 authorised firms to provide voluntary requirements (VREQs) and imposed own-initiative requirements (OIREQs) on 10 authorised firms (compared with 21 VREQs and 9 OIREQs for the previous 12 months), restricting firms’ activities to prevent harm.

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